Blankenberg v. Commercial Ins. Co. of Newark, NJ, C-86-4974 MHP.

• Decision Date: 25 February 1987
• Docket Number: No. C-86-4974 MHP.,C-86-4974 MHP.
• Citation: 655 F. Supp. 223
• Parties: Eleanor BLANKENBERG, an individual, Plaintiff, v. COMMERCIAL INSURANCE COMPANY OF NEWARK, NEW JERSEY, a New Jersey corporation; Continental Insurance Company, a New Hampshire corporation; Lumbermens Mutual Casualty Company, an Illinois corporation; and Does 1 through 25, inclusive, Defendants.
• Court: U.S. District Court — Northern District of California

655 F. Supp. 223

Eleanor BLANKENBERG, an individual, Plaintiff, v. COMMERCIAL INSURANCE COMPANY OF NEWARK, NEW JERSEY, a New Jersey corporation; Continental Insurance Company, a New Hampshire corporation; Lumbermens Mutual Casualty Company, an Illinois corporation; and Does 1 through 25, inclusive, Defendants.

No. C-86-4974 MHP.

United States District Court, N.D. California.

February 25, 1987.

Philip L. Pillsbury, Margaret A. Selter, Pillsbury & Wilson, San Francisco, Cal., for plaintiff.

Philip R. Diamond, Steven M. Essig, Bickel & Diamond, San Francisco, Cal., for Commercial Ins. Co. of Newark, N.J. and Continental Ins. Co.

Robert R. Callan, Cooper, White & Cooper, San Francisco, Cal., for Equifax Services, Inc.

Guy O. Kornblum, Donna P. Clay, James J. Merriman, Kornblum, Kelly & Herlihy, San Francisco, Cal., for Lumbermens Mut. Cas. Co.

OPINION

PATEL, District Judge.

This action was removed to this court on grounds of diversity. Plaintiff has petitioned to amend her complaint to include an additional defendant, to remand the action to state court, and for sanctions under Rule 11, Fed.R.Civ.P., against defendants' counsel. Shortly after filing these motions, plaintiff withdrew her motion to amend the complaint. The motion to remand to state court is DENIED, as is the motion for sanctions. In addition, plaintiff moves to amend to correct the names of defendants already named. That motion is GRANTED.

FACTUAL BACKGROUND

Plaintiff, Eleanor Blankenberg, filed her complaint in state court against defendants Commercial Insurance Company of Newark ("Commercial"), Continental Insurance Company ("Continental"), Lumbermens Mutual Insurance Company ("Lumbermens"), and Does 1 through 25 for breach of contract, breach of the duty of good faith and fair dealing, and intentional and negligent infliction of emotional distress. The defendant insurance companies first petitioned for removal based on diversity jurisdiction in April of 1985, but Chief Judge Peckham of this court, finding "that the Doe defendants destroy diversity at this time," granted the motion to remand without prejudice. The court stated that the defendants may "file a removal petition within thirty days after diversity jurisdiction in this case becomes apparent." Order of June 4, 1985.

Plaintiff served defendant Commercial with the First Set of Interrogatories and Request for Production of Documents on June 19, 1985 and received answers on August 9, 1985. Lumbermens was likewise served, and answered on July 19, 1985. Plaintiff has propounded no discovery since July 19, 1985. She has been in possession of defendants' answers since at least August 9, 1985.

On October 29, 1985, the Contra Costa Superior Court granted plaintiff leave to substitute "Equifax Services, Inc." (Equifax) for "Doe 1." Equifax filed its answer on July 22, 1986. Plaintiff then filed an "At-Issue Memorandum" on July 25, 1986 declaring that "no other parties will be served with a summons prior to time of trial." Defendant insurance companies immediately filed a petition for removal, and plaintiff moved for remand.

DISCUSSION

Doe Pleading Practice

California law permits the pleading of fictitious defendants, or Doe pleading, when the identity of the defendants is unknown.¹ Section 583.210 of the California Civil Procedure Code operates to extend the statute of limitations as to a fictitiously named defendant.²See Lindley v. General Elec. Co., 780 F.2d 797, 799-801 (9th Cir.1986); Brennan v. Lermer Corp., 626 F.Supp. 926 (N.D.Cal.1986). Hence, Doe pleading is regularly used in California state courts to preserve rights of action against unidentified defendants.

Federal courts have not been hospitable to Doe pleading. In diversity actions initiated in federal court, Doe defendants are not permitted. Othman v. Globe Indem. Co., 759 F.2d 1458, 1463 (9th Cir. 1985); Fifty Assocs. v. Prudential Ins. Co. of Am., 446 F.2d 1187, 1191 (9th Cir.1970).³

Removal Practice

In diversity actions removed from state court, the critical inquiry is the viability of the Doe defendants. Frequently the defendants are mentioned only in the caption or described in the complaint in the most general of terms. In other cases, their actual role in the alleged conduct is detailed more fully. The question posed here, as in the other numerous Doe pleading cases in this circuit, is the timeliness of removal.

28 U.S.C. § 1446(b) (1982) sets forth the time within which removal must be effected upon the filing of an initial pleading in state court or, if the case is not initially removable, "a petition for removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable."

If the existence of diversity is clear from the initial complaint the thirty days commences to run upon receipt of that complaint. The action must be removed at its inception. The pleading of Doe defendants, however, makes for great uncertainty. Their presence usually defeats diversity because complete diversity cannot be determined from the face of the complaint. Molnar v. National Broadcasting Co., 231 F.2d 684, 687 (9th Cir. 1956). However, when the complaint gives no "clue" as to "their identity or their relationship to the cause of action" they may be treated as spurious and disregarded for the purpose of determining diversity. Bryant v. Ford Motor Co., 794 F.2d 450, 452 (9th Cir.1986).

In this case the court determined upon the first petition for removal that the Doe allegations were adequate to defeat diversity. The matter was remanded. Defendants could only remove when it became apparent that plaintiff had abandoned the unnamed defendants. Fixing the precise time at which this occurs, and when the thirty days under section 1446(b) commences to run, is difficult.

The Role of the At-Issue Memorandum

One critical juncture in the state court proceedings is the filing of an At-Issue Memorandum. The Memorandum is required by Cal.R. of Ct. 209 (West Supp. 1986). Among the items to be included in the Memorandum is a statement "that all essential parties have been served with process or appeared and that the case is at issue as to those parties." Id., Rule 209(a)(3). Without the Memorandum, a case may not be placed on the civil active list or set for trial.

Implementing this provision, the superior courts have adopted forms that require the attorneys to certify that "all essential parties have been served with process or have appeared" and that the "case is at issue as to all such parties; that no amended or supplemental complaint or cross-complaint or other affirmative pleading remains unanswered; and that ... no other parties will be served with a summons prior to the time of trial...." This is the language of the Memorandum used in this case.⁴

Other courts of this circuit sitting in California have considered the significance of the At-Issue Memorandum in ascertaining the date for removal. Some have held that the thirty-day filing period contained in section 1446(b) begins to run from the filing of the At-Issue Memorandum. See Barngrover v. M.V. Tunisian Reefer, 535 F.Supp. 1309, 1311-12 (C.D.Cal.1982).

More frequently, however, the courts have relied not on the mere filing of the At-Issue Memorandum, but on the totality of factors existing at the time of removal. Thus in Herzig v. Twentieth Century-Fox Film Corp., 129 F.Supp. 845, 848 (S.D.Cal. 1955), the court found removal proper because, in addition to filing the Memorandum, the plaintiff was willing to dismiss the non-diverse unnamed defendants.

In two cases, one in this district and another in the Central District, the courts looked at the role of the At-Issue Memorandum in the state court proceedings and concluded that the Memorandum was not dispositive. See Solorzano v. American Nat'l Ins. Co., 609 F.Supp. 144 (C.D.Cal. 1985); Goodman v. Travelers Ins. Co., 561 F.Supp. 1111, 1113 (N.D.Cal.1983).

In these two cases emphasis was placed on the use of the term "essential" in Rule 209. In order to file the Memorandum all "essential" parties must have been served. However, not all parties must have been served. The California Rules for Superior Courts provide for dismissal of unserved parties. The At-Issue Memorandum does not operate as an automatic dismissal. The Rules permit, upon leave of court, amendment of the pleadings or dropping of the case from the civil active list after the filing of the At-Issue Memorandum. In Goodman, the court was also persuaded against the propriety of removal by the plaintiff's motion to amend the complaint to name the non-diverse unnamed defendants. The motion to amend was made after removal and at the time of the motion to remand.⁵ In Solorzano, the additional circumstance considered by the court was the ongoing discovery. The court took this as evidence that the plaintiff did not intend to abandon the fictitious defendants.

Yet another court was convinced that removal was timely by looking not only at the filing of the At-Issue Memorandum, but also at the plaintiff's Motion to Advance Bench-Bar Settlement Program Hearing and Specially Set for Trial filed four days later. Schmidt v. Capitol Life Ins. Co., 626 F.Supp. 1315, 1318 (N.D.Cal. 1986). The court found the defendant was entitled to rely on this latter date as the date for triggering removal because it was an unequivocal act inconsistent with pursuing the unnamed defendants.

Federal courts sitting in this state have grappled with the problems of California Doe pleading and federal removal statutes in a large number of cases in recent years. Their attempts recognize the need to reconcile the strict limits of federal removal jurisdiction with definitiveness on the time for removal. The result has generally been ad hoc scrutiny of the procedural posture of each case. Consequently, there is...